Advocacy Groups Urge FCC To Investigate Data Caps

At CES, Sen. Ron Wyden laid out his tech policy plans for 2013. One of the more prominent plans was to introduce legislation that would prevent ISPs from instituting data caps. Now some advocacy groups have added their voices calling for federal regulation of data caps.

The Hill reports that Public Knowledge and Free Press are now asking the FCC to launch an investigation into how ISPs utilize data caps on their networks. The groups also want Congress to hold hearings on the issue to determine if data caps are really necessary. One report seems to think they aren't.

A report from The New American Foundation late last year found that data caps are, by and large, used only to introduce false scarcity into the broadband market. This allows ISPs to retain high prices and charge users who use more data.

Advocacy groups also call out ISPs that use data caps as a way of discouraging competition. Many ISPs impose strict caps so consumers don't stream as much video on services like Netflix so consumers are forced to subscribe to cable TV packages that the ISP also conveniently owns. Such actions are not punishable by law at the moment, but proposed legislation from Sen. Wyden would make it punishable under antitrust laws.

What do ISPs have to say about all of this? They claim that data caps are incredibly fair, and actually bring value to the consumer. The companies argue that having data tiers allows consumers who only use the Internet for email can pay for less while those who use a lot of data can pay for more. The major flaw with that reasoning, however, is that ISPs are still discouraging Internet use on their networks when they should be encouraging it. The Internet is a major force of innovation and education, and data caps only impede that in the name of short term profit.

So, how likely is the FCC to take on data caps? The Hill suggests that the commission may take on data caps if it can win its lawsuit against Verizon. The company claims that the FCC has no authority to implement net neutrality rules. If Verizon wins, it would set the kind of precedent that would make data cap regulation almost impossible.